Apparently the much-anticipated Joe Felz Water Study is in, and it says that the illegal 10% water tax is…drum roll, please…illegal. But get this: rather than an honest study, the consultants were clearly told to gin up as much plausible reason to keep as much of the 10% as they could. The result? It’s only 6.7%. Yay!

The only problem is that to reach 6.7%, the consultant cooked up the idea that the Water Fund owed the City rent on land where water reservoirs are located! According to Ad Hoc Water Committee member Greg Sebourn, the total annual rent was figured at $1,374,000 – well-over half of the existing tax.

Of course this scam raises all sorts of new issues, as scams generally do. Such as: the reservoir in Hillcrest Park supports a play field on its deck. Does the City rent this back from the Water Fund? Bet not! The reservoir up at the top of Euclid is situated in a cactus patch patrolled by goats. What’s the rental or development value of a nature park? I dunno, but it’s not much. Has the Water Fund been paying for maintenance on these properties that should have been the responsibility of the General Fund? Bet so.

Then of course there’s the issue of whether the waterworks itself paid for fee title to any of these properties in the first place, a way back when. I wonder if the consultant even bothered to check. Bet not.

And there’s the embarrassing fact that there is no arm’s length relationship between the people that impose the rent and the people that pay it. The City Council can demand any amount of rent they want – then agree to pay it. Why not? The proceeds go to pay their own pensions! Now, that’s not very good, is it?

In any case, the public may find it a bit confusing and unseemly that at the eleventh hour the bureaucrats and their hand-picked consultant are burning the near-midnight oil to drum up ways to charge as much for water as they can that they can keep siphoning money into the General Fund.

Will you please shut up.

Will the city Council buy into this load? Well, of course they will. The vote will be 4-1, and it will be up to the citizens and voters to rectify the scam at the ballot box.

As much as I detest the “rent” concept, why didn’t the consultant suggest the water department “buy” the land from the City? They pointed out that the land’s market value sums to $17 million. Rent payments at $1.37 million annually could buy that land in a little over 12 years.

Of course they didn’t suggest that option because it’s all about generating revenue in the first place.

We (the City) are willing to subsidize the bars who use the public right-of-way by not charging “market rate rent” and yet we charge water ratepayers rent for the use of public property… The idiocy must end.

Vernon, that was exactly one of my points. From a business standpoint it would have made sense for a separate entity to buy these properties years ago for peanuts.

In any case there is no arm’s length relationship to protect the water rate payers – who are not the same class of people as the citizens of Fullerton. And that’s an impossibly subtle concept for the grifters on the city council to grasp.

And I think it would be interesting to find out if the Water Fund fronted any of the money to acquire these sites in the first place.

Another thing, if the water department and “City” are somehow different entities, and thus rent should be paid to the City, shouldn’t the water department have oversight from its own separate elected body?

First, the report addresses, or is supposed to address, TWO issues- 1) how much rent CAN the City collect going forward and 2) how much did the City over charge the Water Fund over the past 3 years.

Second, the consultant/staff offer an “asset exchange option” to deal with the $2.5-million overcharge. That is, they propose erasing the debt by taking $2.5-million in real property and the subsequent future rents off the table by somehow transferring it to…who? The water utility? That’s the City. The Water Fund? That’s a super fund, not an entity.

Again, for this to work you have to believe that somehow the utility infrastructure is NOT owned by the City of Fullerton. That is false. ALL of the water system is owned by the City. Maintenance and repair obligations are paid for through the Water Fund and the Water Fund is operated by…the City.

This is not like the old Fullerton Redevelopment Agency which was a distinctly different agency that answered to the State.

In order to make the land swap and rents legitimate, the water utility would have to be re-established as a separate utility district with it’s own board of directors. This would GROW government instead of reducing it. Backwards instead of forward.

If any of you think that the city is going to willingly refund our money you are delusional.
The one and only way that this will ever be settled equitably will be in court in the form of a class action suit filed by the residents of Fullerton.
Municipalities have basically become business entities, and the only thing that gets a business “to come to Jesus”, is to spank them in the court system where transparency and accountability can be found in spades.

If it is finally and mutually agreed upon that the tax was an error then why not simply reduce the rate until the taxpayer and the “overcharge amount” is settled, like a bond owed and is paid off in “X” amount of years?

The comparison to Redevelopment is apt. True, the Redevelopment Agency was a separate entity – but it was inextricably tied up in City-related decisions with both entities run by the same crowd.

Redevelopment swiped property tax and gave it to people like Ackerman. The Water Fund is used as a cash cow by the City bureaucracy.

Absent honest council persons, i think you have to have a separate decision making body. That’s not a step backwards if the result is honesty and transparency. It’s not like any new people have to be hired.

What I find insulting is not that the taxpayers already own the property, but that the10% in-lieu rip off has more than paid for these sites already, way, way more in fact. To fix the mess the first thing the City needs to do is recognize that the Water users paid off the City for these properties and that there is no more “rent.”

2. They make up a lease on taxpayer owned assets that they were not and should not be charging for, say they should have charged for them and therefore some of the illegal tax was actually justified.

3. 4/5ths of the council will likely pat themselves on the back for only returning 3/15ths of what’s been stolen because a statute of limitations allows them to screw the taxpayers that they represent out of 12 of those years.

4. They claim that they’re going to come up with a fee schedule which effectively refunds what they’ve stolen instead of just actually returning the money to the specific people they’ve stolen it from.

Chris Thompson :So let me get this straight.
1. The city acknowledges that they’ve violated the law for 15 years.
2. They make up a lease on taxpayer owned assets that they were not and should not be charging for, say they should have charged for them and therefore some of the illegal tax was actually justified.
3. 4/5ths of the council will likely pat themselves on the back for only returning 3/15ths of what’s been stolen because a statute of limitations allows them to screw the taxpayers that they represent out of 12 of those years.
4. They claim that they’re going to come up with a fee schedule which effectively refunds what they’ve stolen instead of just actually returning the money to the specific people they’ve stolen it from.
Do I have this right?

Chris- they are apparently trying to do what my sister did in 1st grade, she stole something and my mom busted her but and made her give it back to the store all shamed, asking for forgiveness…Guess who is mom in this scenario? That would be me and you. ( citizens) These guys are incredible, arent they? If I didnt live here I woudnt believe it.

Anonymous :
Are there any attorneys out there that could answer if small claims court could be a venue for settling this for individual households that want a refund if they are found to have overpayed?

I like where your going with this. I heard that a woman recently sued Toyota Motor Corporation in Small Claims Court in Southern California.
Her claim was that the MPG was mis-stated and asked for and received a refund, which subsequently opened up the floodgates for any other Toyota car owner to follow suit and they would prevail based on this woman’s precedent.

I honestly don’t see why this wouldn’t work for Fullerton tax/rate payers?

FFFF has brought alot of corruption from these guys that really need to go. You obviously have some candidates that you endorse. But here is the real problem that I see but that depends what is really going on and how much that is really costing the city which is really hard for an outsider looking in even though I live in Fullerton.
So they are doing things like the illegal water tax to create revenue so that they can increase their pensions and such. But let’s say, all three get recalled and your candidates make it to change these things. Here’s the question: What are you going to replace “corrupt” revenue with? Obviously, the city will need revenue. Will stopping the “corrupt” spending be enough?

Hey Greg, does the City Council get the final word regardless of what you guys recommend to them?

Felz indicated a decision needs to be made by July 1, so I presume this gets voted on when the three idiots are still on the council. If they vote “yes” for the 6.7% in-lieu tax, can this vote be set aside or rescinded by a newly seated council before the fiscal year begins July 1?

FYI Attempted jewel store heist on Commonwealth a few hours ago. The brainiacs not only chose a place close to the FPD but their get away route took them back towards the station. They crashed their get away vehicle at Amerige and Malden and several are still at large and armed. Fullerton High was put on lock down.

More mayhem at fullerton jail. Suspects recently taken into custudy seen walking into police station. Ambulance shows up. attendents walk out with empty stretcher. police car seen leaving from other side. http://s18.postimage.org/expsj47p5/IMG_5195.jpg

At least we weren’t subjected to Goodwipe as the PIO. I did see where two cops paraded one of the suspects in a full circle, appeared to be for the benefit of news cameras. Eerie thoughts about an empty ambulance leaving on one end while a police car leaves on the other.

The 6.7% should be used to pay the bloated pensions of Pat McPension and Don Blankhead. That is why they will vote yes for accepting the consultant’s report!
Now do you see why they are on city council even though they are getting up there in age? No disrespect, but its time for a change to end the self serving attitudes.

The water scam reminds me of of some of the 990 forms I have perused over the years in this town. Yeah the coyotes over in the Ward preserve are probably expensed out as a security system. Oops, maybe I have given these Hazard County officials some free advice.

The stenographers over at the Fullerton Snories site have duly published the Water Study without a word of analysis or insight. Perhaps some Fullerton residents may wish to leave a few comments and fill the void.

First from an accounting standpoint, any allocation is only as good as its underlying assumptions and the consistent application of those assumptions. If the former are wrong and/or the latter is not applied consistently, you get a totally distorted answer.

After all this time and the dollars spent for this consultant service, it seems that we still have much more work to do to ensure that going forward that the rate payers are not overcharged again.

Since water rate movement has little or no relationship to the costs of the city administering the water fund, the suggestion that any static rate, whether it be 10%, 6.7% or 5% is the right answer makes no sense whatsoever.

Any static rate to be acceptable must show that the rate payers will be the winners all of the time, (i.e. a rate that will not overcharge the rate payers). If not, the administrative costs should be calculated annually and a rate based on that calculation charged for the next year. If the city does not want to perform this exercise yearly, I think the Howard Jarvis group have a good argument that no fee whatsoever should be charged to the taxpayers. After all the law is that any fee added to our bill must be based on actual costs of administration not a overestimated percentage that benefits the city twice. First by overcharging the taxpayers and second by allowing them not to do the necessary due diligence to come up with the right amount yearly.
As far as the details, I need to study them more closely.

The basis for the ACTUAL COSTS OF ADMINISTRATION means exactly as stated.
Any other claims may be misappropriation and is fraudulent if done intentionally.
But then again, the entire 10% added tax is fraudulent.

The underlying “fee” of the streets and alleys are generally owned by the property owners of the adjacent properties. Usually from the centerline to the outside of the right of way, which is often the sidewalk. Someday in the not to distant future, when the cities are destitute, they will let the average Joe know this by requiring the adjacent property owners to maintain the right-of-ways at all times, not just when the properties get developed or redeveloped. Yet, I can asssure you the cities will maintain all use rights to those r o w’s. You see, the public sector unions have crafted laws such that Public employees pension contracts cannot be broken but the government’s contracts with the people are invalid once they do not serve to enrich the “public servants”.

The decision needs to be approved by 7/1/12 so that the 12-13 budget can be finalized. Of course this should have been done last year; and the year before, and the year before etc.

Felz has deliberately wasted a year solving the budget implications of simply obeying the law. And he bought himself another year in the statute of limitations. Really borderline criminal if you ask me.